This Signals guest column was submitted by Elizabeth A. Price, biotech product liability litigation team leader at the Atlanta-based law firm Alston & Bird LLP (email: lprice@alston.com). Signals is pleased to offer guest columns on topics of interest to biotechnology and pharmaceutical executives. The author's opinions and research are her own and Signals assumes no responsibility for the accuracy of this information.

The Time: The not too distant future.

The Place: The corporate boardrooms of two of the world's top biotechnology companies.

The Scene: Hastily called meetings between the top brass and their legal teams.

The Reason: Mass tort litigation.

The Background: After years of testing and experimentation, biotech researchers have developed a new type of shellfish -- called crabster -- which is not only edible, but can survive in both warm coastal waters and the frigid temperatures of the ocean. The product was quick to gain the necessary regulatory approvals, and it became an instant hit with consumers, who embraced the crabster wholeheartedly.

The main staple of Earth is now a starch and vegetable product called ricorn; in fact, 99 percent of the world's population makes ricorn a part of their daily diet. As a result of the highly desirable genetic trait developed in crabster which allows it to survive in hot or cold regions, many companies had been working on a way to genetically modify ricorn so that it can be grown in climates with extreme temperatures. Eventually, one company succeeds and GM ricorn is introduced to the marketplace amid great fanfare. However, within a very short time it becomes apparent that a not insignificant minority of the population has a severe and sometimes fatal allergic reaction to crabster and hence to the GM ricorn. Ricorn's manufacturer immediately institutes a recall of all GM ricorn, which, given its popularity, has likely been purchased by a large segment of the population already.

In an attempt to quickly develop a treatment for those who do have an allergic reaction to the GM ricorn, a gene therapy company develops an adenovirus vector carrying immunoglobulin genes for the purpose of conducting a gene transfer experiment. In the course of the experiment, several subjects who are treated with the vector develop complications and die.

In an incredibly short time, the ricorn manufacturer and the gene therapy company are defendants in multiple lawsuits alleging a variety of tort claims including negligence, product liability, misrepresentation, fraud, lack of informed consent and more. It's clear that any one of these lawsuits could be "bet the company" litigation.


Wacky and farfetched? It couldn't happen here? Think again — and ask Aventis CropScience and Kraft Foods. Or the University of Pennsylvania and Genovo Inc. (which was recently acquired by Targeted Genetics Corp.) For them, the product-liability future is now.

Kraft and Aventis CropScience, among others, are both involved in the Fall 2000 recall of taco shells contaminated by Starlink corn : Aventis CropScience because it manufactured the corn, which contains a protein (B. thuringiensis Cry9C, which acts as an insecticide) not approved for human consumption; Kraft because it distributed the taco shells under the "Taco Bell" name. A “Third Amended Class Action Complaint” is currently pending in federal court in Illinois, filed by plaintiffs against Aventis CropScience, Kraft and Azteca Milling, for alleged allergic reaction to Starlink-containing taco shells. As well, the FDA has received several complaints of allergic reactions allegedly linked to the ingestion of products containing Starlink corn.

The second instance, of course, surrounds the death in September 1999 of Arizona teenager Jesse Gelsinger during a gene therapy experiment at the University of Pennsylvania's Institute for Human Gene Therapy (which gains about 25 percent of its support from Genovo). (See Gelsinger, et al. v. The Trustees of the University of Pennsylvania, Genovo, Inc., et al., Civil Action File No. 001885, Philadelphia County Court of Common Pleas, September 2000.) In early November 2000, the lawsuit was settled for an undisclosed sum.

How do companies that are developing cutting-edge technologies to improve the lot of humankind find themselves in this unenviable position? Mass tort litigation (for wrongful acts that cause personal injury and/or property damage) often springs up in just such an innocuous way. What is this beast and how can companies control it?



Typically, mass tort litigation arises out of a popular product that becomes the subject of intense public and media scrutiny as a result of early, and sometimes incomplete, medical and scientific reports or multiple claims of injury. Oftentimes, the claims have merit, but just as often they do not. (For example, in 1994 the mass hysteria surrounding cola cans that contained syringes or dead rodents resulted in an outbreak of claims, which were never substantiated and sometimes found to be fraudulent.)

Sometimes the claims appear to have initial merit on a scientific basis, but are later shown to have no basis in science at all. (In Allison v. McGhan Medical Corp., 184 F.3d 1310 [11th Cir. 1999], for instance, claims that silicone breast implants caused systemic harm were found to lack the necessary scientific basis to render the expert testimony admissible. The case was, therefore, dismissed.)

Typical allegations in litigation of this type include breach of express warranty, breach of implied warranty, negligence, strict product liability, misrepresentation, and fraud. Where regulatory agencies are involved, plaintiffs will often allege fraud not only upon themselves, but fraud upon the regulatory agency. Claims of negligent design, manufacture and failure to warn are encompassed in these suits, as well. When commercial claims are rolled into the matter, claims for lost profits and consequential damages will often be asserted.

If (or when) this litigation arises in the biotechnology sector, the claims will not be much different. In our hypothetical example, for instance, one could expect to see at least the following claims asserted against the ricorn manufacturer and the gene therapy company:

§ Strict product liability, and in particular, defective design/manufacture/testing: Under a strict liability theory, the manufacturer of a product (and perhaps other parties in the stream of distribution or sale) is held liable for placing a defective product on the market regardless of fault. In this case, allegations that the ricorn was defective because it contained a potentially harmful genetic trait of the crabster would be at the forefront of the claims. For example, plaintiffs would undoubtedly assert that the failure to label the ricorn as containing crabster when a significant portion of the population is allergic to shellfish is a defect; also likely is a claim that there was inadequate testing before the product was placed on the market. The gene therapy company would encounter similar claims, as well as claims of failure to obtain informed consent/failure to warn. Many of these claims would focus on the pre-manufacture testing and design, and the science supporting any decision would be closely scrutinized.

§ Breach of warranty and breach of implied warranty: These claims would be based on an allegation that the product did not conform to the warranty provided with the product or to the implied warranty that it would be fit for a particular purpose. These claims could be asserted not only by the consumer, but also by, for example, farmers who planted the ricorn and adjacent farm owners who would claim they are unable to plant on “tainted” land.

§ Fraud and/or misrepresentation: Plaintiffs would claim that they were misled and wrongly encouraged to buy the ricorn or participate in the gene therapy trial based on false and/or incomplete information. For instance, they would claim that the ricorn manufacturer placed false and misleading ads, used deceptive sales techniques and otherwise defrauded them into purchasing ricorn. In the case of the gene therapy company, allegations that the trial participants were intentionally not informed about the risks or prior adverse effects will be made. Finally, claims of fraud on the FDA would be commonplace.

§ Wrongful death and survival actions: These claims would be based on the deaths of any individuals and would seek recovery not only for the lost lifetime income of the deceased, but also for the loss of services, support, affection and companionship the survivors sustained.

In addition, claims of violations of state trade practices acts or consumer protection statutes would be typical, as would conspiracy theories and allegations of intentional infliction of emotional distress.



Clearly, if companies can take any steps to prevent mass tort litigation before it erupts, they should make all efforts to do so. Some of the potential steps include: establishing and managing incoming complaints, product recalls and Q & A web sites or brochures for consumers and mass media.

Every company, whether emerging or established, can be proactive in this regard. For instance, anything from a listing of numbers or emails for contact persons in case of complaints to a full-blown compliance manual could be effective. The main objective is to have an established point person or team for receipt of product complaints in order to monitor the type, frequency and severity of calls. Of course, the greatest test of effectiveness is how the system works in a real-life situation. Without waiting for that to happen, companies can test their systems either by self evaluation or by a "war games" scenario. In addition, formation of a crisis management team before the crisis is imperative. At the very least, this team should consist of: management personnel with the authority to make final decisions; legal counsel; scientists and/or others with knowledge of the underlying product; and public relations advisers.

One of the initial problems that the hypothetical defendants in our case might encounter is lack of corporate knowledge of the severity or widespread nature of the complaints. Setting aside regulatory reporting requirements, companies need internal management and control of adverse health effects reports in order to foresee the potential mass tort before it occurs. Having an established procedure for reporting complaints before they start to come in can prevent an unwelcome surprise.

Other steps include the development of a blue ribbon panel of experts to assist the company in setting its policy, as well as reviewing the science behind the product. In our hypothetical, for instance, the early development of a good scientific defense will be crucial and would involve identification and early retention of experts, analysis of scientific literature and testing, and identification of company experts to address issues pertaining to the product.

Communication with the consumer and the media are of utmost importance – retreating like an ostrich when the specter of mass tort litigation looms is one of the surest ways to guarantee that it will, in fact, descend with a vengeance. Biotechnology is yet another new frontier which presents itself as ripe for litigation, in large part because of lack of public awareness and misunderstanding regarding the science. Though there is no sure way to prevent mass tort litigation, addressing these two aspects is not only feasible but can ultimately stave off potential claims.